It is not necessary for the parties to exchange unequal consideration in a conditional insurance contract. which of the following best describes a conditional insurance contract? The above question Which of the following BEST describes a conditional insurance contract?, Was part of Insurance MCQs & Answers. there is the potential for an unequal exchange of value I hope you got the correct answer to your question. C) apparent authority B) the unwritten authority that the agent is assumed to have Child term rider Payor rider Family maintenance rider Family income rider, What happens to the coverage under a children's term rider when that child reaches a certain specified age? Only the insurance company has legal obligations. It allows for a spouse to be added as a rider to a life insurance policy It allows for policy loans to be advanced to the insured in the event of unemployment It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill It allows for a third party to purchase a life insurance policy at a discounted rate and immediately advance a portion of the death benefit, All of these are standard exclusions found in a life insurance policy EXCEPT hazardous occupations aviation disability war, Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue? Business partners Modified Endowment Contract Current assumptive whole life Credit life insurance Equity index whole life, What kind of life insurance policy covers two or more people with the death benefit payable upon the last person's death? C) the terms must be accepted or rejected in full Which of the following is true of the law of contracts? B) Offer and acceptance discreet Multiple-choice. Options A) A contract that requires certain conditions or acts by the insured individual B) A contract that has the potential for the unequal exchange of consideration for both parties C) A contract where one party "adheres" to the terms of the contract A fixed cash value A flexible premium schedule A fixed death benefit The ability to take out a policy loan, The least expensive option to pay off a 30-year mortgage balance would be convertible term life decreasing term life adjustable term life increasing term life, Pre-death distributions are typically taxable, Which of these describes the result of a modified endowment contract that failed to meet the seven-pay test? A contract that requires certain conditions or acts by the insured individual A contract that has the potential for the unequal exchange of consideration for both parties A contract where one party "adheres" to the terms of the contract A contract where only one party makes any kind of enforceable contract, statements made in the application and the premium, In a life or health insurance contract, "consideration" would be the offer and acceptance premium only statements made in the application and the premium statements made in the application only, According to the principle of Utmost Good Faith, the insured will answer questions on the application to the best of their knowledge and pay the required premium, while the insurer will deal fairly with the insured and it's underwriting issuance of the policy promises made legal reserve, All of the following are elements of an insurance policy EXCEPT definitions other insurance claim forms conditions, The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as Apparent Estoppel Aleatory Unilateral, Which of the following is an example of the insured's consideration? C) promises made Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period? A) there is an element of chance and potential for unequal exchange of value or consideration for both parties Which military service exclusion clause would pay upon his death? Who assumes the investment risk with a fixed annuity contract? Which of these features are held exclusively by variable universal life insurance? Net death benefit will be reduced if the loan is not repaid No interest will be charged on loan balance Term life policies are the only type of insurance that allows policy loans A loan can be taken out for up to the face amount of the policy, Ownership of a life insurance policy may be temporarily transferred with a(n) collateral assignment absolute assignment transferable assignment beneficiary assignment, provide evidence of insurability to the insurer, In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST remit all past-due premiums within the grace period provide evidence of insurability to the insurer resubmit a new life insurance application provide a valid reason for the lapse, Which of the following is considered to be an alternative to a life settlement? Events are those which cannot be controlled by either . Sorry, you have Javascript Disabled! Policy Application Riders Certificate of Authority, A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n) guaranteed term rider guaranteed insurability rider accelerated benefit rider cost of living rider, The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid minus indebtedness and with interest during the last 12 months minus indebtedness and without interest during the last 6 months, A life insurance policyowner does NOT have the right to change a beneficiary select a beneficiary take out a policy loan revoke an absolute assignment, A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT fare-paying passenger pilot of personal airplane suicide war, The insurer's obligation to pay a death benefit upon an approved death claim, Under a life insurance policy, what does the insuring clause state? Restoring an insured to the same condition as before a loss is an example of the principle of. What types of life insurance are normally used for key employee indemnification? C) Only the insurer is legally bound Typically, bilateral contracts involve an equal obligation or. B) Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties This legal agreement requires prior performance of another agreement or clause in order to be enforceable. Sharing commissions with a producer licensed in the same line of business. The terms of the policy typically outline these conditions, which may include paying premiums on time and maintaining the insured property in good condition. Because of this, an insurance contract is considered voidable conditional aleatory unilateral, Who is responsible for assembling the policy forms for insureds? In this situation, who will receive Bob's policy proceeds? B) implied authority D) Insurance producers, If a material warranty violation on the part of the insured is found, what recourse does an insurer have? An insurer's claim settlement practices are regulated by the Securities and Exchange Commission (SEC) National Association of Claims Adjusters (NACA) National Association of Insurance Commissioners (NAIC) State insurance departments, A life insurance company has transferred some of its risk to another insurer. How do insurers predict the increase of individual risks? Aleatory Contract: A contract type in which the parties involved do not have to perform a particular action until a specific event occurs. Completing all applications and collecting initial premiums. B) concealment Term, whole, and universal life insurance. Eventually, they retire and dissolve the business. A) Insurability Insurance contracts are unilateral contracts. Naming a contingent beneficiary as all surviving children is described as which term? B) Law of adhesion Which of the following would be a valid reason why a policy premium would be higher than the standard premium? D) the authority to add provisions to a contract, C) the authority to represent the insurer, Which of the following contracts is defined as "one that restores an injured party to the condition that was present before the loss"? be filed with the state Under the McCarran-Ferguson Act, what is the minimum penalty for this? the contract must be aleatory The most appropriate description ascribed to the meaning of definition from the options given is ; A precise statement of the qualities of an idea, object or process. Intentional withholding of material facts that would affect an insurance policy's validity is called a(n). Key elements of Organizational Behavior - People, Structure ,Technology & External Environment | Organizational Behavior, Penology - Meaning, Types, Importance, Scope and Example | Sociology, Karmachari Sanchaya Kosh - | Employees Provident Fund Nepal, Perceptual Errors -Types of Perceptual Error | Fundamentals of Organizational Behaviour, Difference between Manufacturing and Service Operations | Operation Management. D) Competent parties, Which of the following BEST describes a conditional insurance contract? B) guarantee Craig purchased a life insurance policy for enabling his heirs to pay estate taxes. It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill. James is the insured on a life insurance policy where his age was misstated on the application. After 15 years, the cash value has accumulated to $100,000 and the policy's face amount has become $600,000. In most insurance policies, the insurer is the only one who makes a legally binding promise to pay insured claims. Which of the following policies does NOT build cash value? Ken is a producer who has obtained Consumer Informations Reports under false pretenses. The insured does not meet established underwriting requirements, The type of multiple protection coverage that pays on the death of the last person is called a(n). Which of the following does a producer NOT have a fiduciary responsibility to? How often must the Commissioner examine each domestic insurance company? A) warranty What does the Group Life underwriting risk selection process help protect insurance companies from? Adjustable universal life policy Flexible universal life policy Variable universal life policy Modified universal life policy, Jonas is a whole life insurance policyowner and would like to add coverage for his two children. Apparent At what point may a producer sell insurance for an insurer? issuance of the policy This is an example of: An example of unfair discrimination would be, When an insurer charges a higher rate for insurance based on an insureds race, religion, or national origin, Fixed period settlement options are considered to be a form of a(n). Which type of clause describes the following statement: "We have issued the policy in consideration of the representations in your applications and payment of the first-term premium". C) Business partners A) Sister and brother Interest on policy loans is tax deductible Premium payments are tax deductible Pre-death distributions will become taxable Cash value cannot be surrendered early, seeks temporary protection and lower premiums, Term insurance is appropriate for someone who seeks living benefits for themselves seeks a policy that builds cash value seeks temporary protection and lower premiums seeks permanent protection and higher premiums, Shirley has a $500,000 10-year non-renewable level term life policy. the terms must be accepted or rejected in full Accelerated death benefit An example of an unfair claims practice would be Which of the following BEST describes a conditional insurance contract? Which of the following BEST describes a conditional insurance contract? Both partners are still married at the time of Bob's death. Conditional insurance contracts are insurance policies that require the insured person to satisfy certain conditions in order to become effective and/or to be paid out by the insurer. b. benefits paid under workers compensation. D) conditions, The authority granted to a licensed producer is provided via the An example of an unfair claims settlement practice is, Turning down a claim without providing the basis of denial. Because insurance premiums are tax-deductible Because dividends are already subject to capital gains Because dividends are payable directly to the policyholder Because dividends are considered to be a return of premium, A type of insurer that is owned by its policyowners is called domestic mutual stock in-house, What is considered to be the primary reason for buying life insurance? What is this an example of? Identify the type of financing (stock or bond) that best answers the question. offer A.$1,656 The period of coverage The face amount The premium payments The cash value, at a predetermined date or age, regardless of the insured's health, A Renewable Term Life insurance policy can be renewed at a predetermined date or age, regardless of the insured's health only if the insured provides evidence of insurability anytime at the policyowner's request typically with no change in premium, Pre-death distributions will become taxable, Under a Modified Endowment Contract, what are the likely tax consequences? Joint life policy Survivorship life policy Dual life policy Multiple life policy, A life insurance policy that contains a guaranteed interest rate with the chance to earn a rate that is higher than the guaranteed rate is called whole life group life credit life universal life, Can be converted to permanent coverage without evidence of insurability, Donald is the primary insured of a life insurance policy and adds a children's term rider. express authority Insurable interest can be based on the love and affection of individuals related by blood or law An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of Connect the text to your own experiences. Provide an opinion. B) NAIC conditional B) A contract that has the potential for the unequal exchange of consideration for both parties. Both partners are still married at the time of Bob's death. D) legal reserve, In an insurance contract, the element that shows each party is giving something of value is called Which type of life insurance policy is this? When the term insurance expires. Which of these factors is NOT taken into account when determining an applicants life insurance needs? warranty A) fiduciary bond A) Unilateral (C) Both parties exchange goods of equal value. Utah requires that an insurance producer must complete ___ hour(s) of continuing education on the subject of law and ethics every reporting period. be in writing $1,000 $3,000 $5,000 $7,000, A nonparticipating company is sometimes called a(n) alien insurer mutual insurer reinsurer stock insurer, Because dividends are considered to be a return of premium, Why are dividends from a mutual insurer not subject to taxation? If thats the case, you dont have to worry anymore. Conditional insurance contracts are insurance policies that require the insured person to satisfy certain conditions in order to become effective and/or to be paid out by the insurer. Only the insured pays the premium Only the insured can change the provisions Only the insurer is legally bound Only the insured is legally bound, A professional liability for which producers can be sued for mistakes of putting a policy into effect is called fiduciary bond errors and omissions fiduciary trust errors and oversights, In order for a contract to be valid, it must be filed with the state be signed and witnessed by an attorney be in writing contain an offer and acceptance, Which type of clause describes the following statement: "We have issued the policy in consideration of the representations in your applications and payment of the first-term premium". voidable D) collateral, Express power given to an agent in an agency agreement is Term insurance is appropriate for someone who, Seeks temporary protection and lower premiums. B) producer weegy. Updated 10/6/2017 9:10:03 AM. In order to maintain coverage and make a successful claim, its crucial that policyholders read and understand their insurance contract carefully. This is called risk retention preexisting conditions law of large numbers adverse selection, What is known as the immediate specific event causing loss and giving rise to risk? Proof of insurabiilty Changes in the insuring clause Premium increase Premium decrease, What is the name of the provision which states that a copy of the application must be attached to the policy when issued? Barbaras policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. A) Authority given in writing to an agent in the agency agreement What is the purpose for having an accelerated death benefit on a life insurance policy? A) Sue the insured nonparticipating life insurance policy participating life insurance policy divisible surplus life insurance policy straight life insurance policy, Which of the following is considered to be an event or condition that increases the probability of an insured's loss? Adjustable life policy Modified life policy Endowment policy Universal life policy, How are survivorship life insurance policies helpful in estate planning? C) representation Provide funds to help fund retirement Provide funds to help pay taxes Provide funds for funeral expenses Provide tax deductions for premium payments, lower than the typical whole life policy during the first few years and then higher than typical for the remainder, The premium for a Modified whole life policy is higher than the typical whole life policy during the first few years and then lower than typical for the remainder lower than the typical whole life policy during the first few years and then higher than typical for the remainder normally graded over a period of 20 years level for the first 5 years then decreases for the remainder of the policy, The type of policy which pays on the death of the last person is called joint life survivorship life dual life shared life, A life insurance policy that is subject to a contract interest rate is referred to as adjustable life group life term life universal life, a policy that is paid up after only one payment, A single premium cash value policy can be described as a policy that is paid up after only one payment a policy that only requires an annual payment a policy that is guaranteed issue a policy that covers two or more lives, A limited payment whole life policy provides protection for 20 years lifetime protection protection for more than one person discounted premiums, A policyowner may change two policy features on what type of life insurance? Guaranteed Insurability rider Family term insurance rider Family whole insurance rider Payor benefit rider, A partial surrender is allowed in which of the following life policies? Rob recently died at age 60. a) a conditional acceptance allows the parties to negotiate the definite terms of the contract upon the completion of the contract. The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? See answers. Law of Agency The gap between the total death benefit and the policys cash value. $0 $5,000 $10,000 $15,000, Determine financial strength of an insurance company, What is the primary purpose of a rating service company such as A.M Best? aleatory Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index. A) A contract that requires certain conditions or acts by the insured individual Intent, The deeds and actions of a producer indicate what kind of authority? Premium clause Consideration clause Adhesion clause Contestability clause, When the principal gives the agent authority in writing, it's referred to as express authority implied authority apparent authority imposed authority, Ambiguities in an insurance policy are always resolved in favor of the insured producer insurer underwriter, ______ is NOT an element of a valid contract. Death benefits Cash value Loading costs Separate account investments, Which policy feature makes a universal life policy different from a whole life policy? Which of the following statements correctly describes a contract of indemnity? Which of the following best describes the MIB? C) Charge more premium Which of the following products would allow him to accomplish this? A) A contract that requires certain conditions or acts by the insured individual If she dies 15 years after the policy's inception date, how much will her beneficiary receive? Which of the following BEST describes a conditional insurance contract? conditions, Legal purpose is a term used in contract law meaning Increasing Term Life policy Nonparticipating policy Modified Whole Life policy Universal Life policy, What is the automatic continuance of insurance coverage referred to as? underwriter, Life Insurance Policies - Provisions, Options, Fundamentals of Financial Management, Concise Edition, Micro Oneliners: Urinary Tract Infections (UT. Law of large numbers U.S. Census Average mortality incidents Experience of morbidity, Insurance represents the process of risk selection avoidance transference assumption, Doctors pooling their money to cover malpractice exposures, An example of risk sharing would be Adding more security to a high-risk building Choosing not to invest in the stock market Doctors pooling their money to cover malpractice exposures Buying an insurance policy to cover potential liabilities, All of the following are examples of pure risk EXCEPT Losing money at a casino Injured while playing football Falling at a casino and breaking a hip Jewelry stolen during a home robbery, the terms must be accepted or rejected in full, Under a contract of adhesion, there is the potential for an unequal exchange of value the insurer's obligations are dependent upon certain acts of the insured individual the terms must be accepted or rejected in full only one party makes any kind of enforceable promise, According to life insurance contract law, insurable interest exists when any business relationship exists at the time of application at the time of death only when determined by a judge, In an insurance contract, the insurer is the only party legally obligated to perform. contain an offer and acceptance, In an insurance contract, the insurer is the only party legally obligated to perform. An applicants character and personal habits can be obtained for underwriting purposes from which source? In which form of corporate financing is the investor also an owner? Orissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. there must be an offer and acceptance What kind of policy is this? She is receiving the death benefit in payments of $10,000 per month until the principal and interest has been paid out. Risk reduction Risk transference Risk avoidance Risk retention, The cause of a loss is referred to as a(n) hazard adversity peril risk, How do insurers predict the increase of individual risks? The present cash value of the policy equals $250,000. unilateral, Ambiguities in an insurance policy are always resolved in favor of the Competent parties Bob dies 12 months later. Which of the following BEST describes a conditional insurance contract? C) insurer Which of the following best describe the term definition. d. a deductible stated in the policy's provision. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. Reduction of premium One year term Paid-up additions Accumulation at interest, All of these are valid policy dividend options for a life insurance policyowner EXCEPT cash outlay to the policyowner accumulate without interest reduction in policy premium buy additional insurance coverage, Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Eventually, they retire and dissolve the business. term, whole, and universal life insurance increasing term insurance joint, credit, and group life insurance adjustable, permanent, and limited-pay life insurance, Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index. C) aleatory the contract is voidable upon proof of fraud. A non-contributory health insurance plan helps the insurer avoid. C) the authority to represent the insurer A Modified Endowment Contract (MEC) is best described as, A life insurance contract which accumulated cash values higher than the IRS will allow, Doctors pooling their money to cover malpractice exposures, The free-look provision gives the policyowner, The right to return the policy for a full refund within a specified number of days. C) A contract where one party "adheres" to the terms of the contract. Term Straight Life Endowment Variable Life, A life insurance policy that has premiums fully paid up within a stated time period is called stated payment insurance limited universal insurance stated modified insurance limited payment insurance, Reggie purchased a life insurance policy with a face amount of $500,000. What is a corridor in relation to a Universal Life insurance policy? The gap between the total death benefit and the policy's cash value The gap between when a claim is filed and when the death benefit is received The amount of interest that has accumulated in the policy's cash value The point in time when the policy's cash value reaches $0, Rob purchased a standard whole life policy with a $500,000 death benefit when he was age 30. B) other insurance Which type of multiple protection policy pays on the death of the last person? Which Of The Following Best Describes A Conditional Insurance Contract, A) A contract that requires certain conditions or acts by the insured individual, B) A contract that has the potential for the unequal exchange of consideration for both parties, C) A contract where one party adheres to the terms of the contract, D) A contract where only one party makes any kind of enforceable contract. The face amount and premium will remain constant over the 10-year period. D) Evident authority, Which of the following is an example of the insured's consideration? Policyowner may increase or decrease the premium payments Policyowner may increase or decrease the face amount Policyowner can contribute large sums of money Policyowner has the right to select the investment which will provide the greatest return, All of the following riders can increase the death benefit amount EXCEPT Cost of Living Waiver of Premium Accidental Death Rider Guaranteed Insurability, Which of these is NOT considered to be a common life insurance nonforfeiture option? (B) Both parties adhere to the contract. insurer B) Contract of adhesion Policy loans are disallowed The premium payments will be tax deductible Pre-death distributions are typically taxable Withdrawals will be prohibited, When a whole life policy is surrendered, income taxes may be owed, All of these statements concerning whole life insurance are false EXCEPT Policyowner can take out a policy loan up to the face amount When a whole life policy is surrendered, income taxes may be owed Coverage is normally temporary The death benefit is not affected by outstanding loans, A life insurance policy which contains cash values that vary according to its investment performance of stocks is called Increasing Term Life Modified Whole Life Variable Whole Life Adjustable Whole Life, Which of these riders will pay a death benefit if the insured's spouse dies? A) Parties involved in the contract other insurance A) producer's apparent authority C) Authority given to handle claims and process payments Which course of action is the insurer entitled to when deliberate concealment is committed by the insured? promises made If Mike dies first, the policy proceeds will no longer provide insurance protection will go to Mike's estate will be divided by probate will not be paid until the last brother dies, The gap between the total death benefit and the policy's cash value, What is a corridor in relation to a Universal Life insurance policy? Bob and Tom start a business. Countersignature, Which of the following is an example of the insured's consideration? If threats or force is used to affect an insurance transaction, the unfair trade practice of __________ has been committed. A Modified Endowment Contract (MEC) is best described as A life insurance contract which accumulates cash values higher than the IRS will allow An annuity contract which was converted from a life insurance contract A modified life contract which enjoys all the tax advantages of whole life insurance A life insurance contract where all withdrawals there must be legal reasons for entering into the contract Returning a portion of a premium as inducement to purchase insurance, An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of, Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out.
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